The European Deforestation Regulation and EU’s Normative Power: Shaping Global Trade for Sustainability

On October 2nd, the European Commission proposed to delay the implementation of the EU’s Deforestation Regulation (EUDR), a critical element of the European Green Deal, for an extra 12 months. Climate change and biodiversity loss add urgency to the measure, yet the EUDR presents significant challenges in implementation. These discussions revolve not only on logistics and technical issues but also around fairness, questioning how to balance environmental goals with the differing capacities and responsibilities of countries. In essence, the EUDR can be examined as an example of the EU's normative power, as it aims to shape global norms by trade policies and environmental standards.

Ana Sánchez Antelo

Deforestation remains a significant global challenge, impacting climate, biodiversity, water resources, and communities. Agricultural expansion drives almost 90% of deforestation worldwide, with the EU responsible for 13-16% of this impact through its imports, making it the second biggest importer of deforestation-linked goods after China. Thus, the EU’s commitment to halting deforestation would significantly impact producer countries, especially in the Global South, as well as shape global trade dynamics. 

To address these pressing concerns, the EU Deforestation Regulation (EUDR) was introduced as part of the European Green Deal, aiming at mitigating climate change and preserving biodiversity beyond the Union’s borders. In practice, the regulation prohibits placing 7 agricultural products (cattle, wood, cocoa, soy, palm oil, coffee, rubber, and some of their derived products) on the EU market, if they were produced on land that was deforested or subject to forest degradation after 31 December 2020. Building on past initiatives like the 2010 EU Timber Regulation, the EUDR covers more commodities and stricter requirements such as risk assessments, traceability, and geolocation data. These added requirements have sparked backlash from multiple stakeholders due to concerns over impacts on smallholders, trade and legality issues, and increased administrative burden and costs.

Copyright: Guidehouse, 2024

In Ursula Von der Leyen’s political guidelines 2024-27, she emphasized the need to systematically assess the impact of “our” laws in non-EU countries and ensure they have the tools to make these regulations mutually beneficial. The previous Commission initiated a shift from a “donor-recipient relationship” with producer countries to a “partnership of equals”, exemplified by the transformation of DG DEVCO into DG INTPA. However, the Strategic Framework has been criticized for lacking the partnership ambition, focusing instead on technical and development cooperation.  Additional critique has arisen around the creation of a benchmarking system to classify countries as low, standard, or high-risk, determining the level of due diligence required for trading with the EU.

The regulation came into force in June 2023, with implementation initially scheduled for December 2024 for large businesses and June 2025 for SMEs. However, the European Commission requested a 12-month extension, which was subsequently approved by the Council and is anticipated to receive approval from the European Parliament during the upcoming plenary session in Strasbourg on November 13–14.

What it means for producer countries

Countless countries in the Global South have criticized the EUDR as “unilateral,” arguing that it unfairly burdens local producers, particularly small businesses. The European Commission has been obliged to defend accusations against neo-colonialism.

Brazil

Brazil has been one of the countries voicing its concerns towards the EU’s regulation. According to Paulo Lima, EUDR specialist and program manager at Solidaridad, the concerns stem not from the "why"—the regulation’s objectives—but from the “how”—its methods of implementation. While the EUDR presents a great opportunity for Brazil to advance the implementation of Forest Code and the CAR, and strengthen policies regarding deforestation, it also presents several challenges. The primary concerns are the limited time for compliance and the financial burden it places on smallholder producers, who may struggle to meet the regulation's requirements. 

Indonesia

When the regulation entered into force in June 2023, Indonesia accused the EU of 'regulatory imperialism', criticizing it as unilateral and disconnected from the realities faced by local producers. The EU represents Indonesia’s third-largest export market for palm oil, and a significant exporter of cocoa, coffee, rubber and wood. Despite the palm oil sector being relatively well-prepared due to existing certification measures, 97,5%  of Indonesia’s smallholder palm producers are unable to meet the EUDR's requirements. Many of these producers meet the necessary conditions but face significant challenges in proving their compliance. Other difficulties stem from the need to align with Indonesian data protection laws and discrepancies in deforestation definitions. The EUDR adopts the international definition of deforestation provided by the Food and Agriculture Organization of the United Nations (FAO), which differs in many cases from national definition, further exacerbating the implementation challenges.

Ethiopia

Even if it is not implemented yet, the EU is shifting some of its sourcing from Ethiopian coffee towards larger, more traceable farms in other countries, which can better meet the EUDR-requirements. For Ethiopia, the EU market represents one third of its coffee exports. The challenge with the EUDR relies on the fact that most of the coffee is grown in forested areas, due to optimal climate conditions (much less damaging than monoculture plantations seen in other countries). Another challenge is the big number of smallholder farmers (around 5 million) who lack the expertise or resources needed to collect data required for the EUDR. However, Ethiopia's efforts to adapt to the EUDR can be seen in the recent National Action Plan. European coffee companies need to co-invest in traceability and due diligence systems for Ethiopian producers to help them become EUDR compliant.

Criticism also arises from inside the EU institutions, with the European People’s Party group, for example, defining the EUDR as a “bureaucratic monster”.

Normative power, climate justice and historical perspectives

The EUDR showcases the EU’s normative power in international relations, reflecting how the EU sets environmental standards that impact global trade dynamics. We can observe it, for example, in the growing trend of firms outside the EU lobbying for domestic companies to adjust to European standards.

A critical analysis requires reflecting on whether the EU’s actions align with their messages and values when pursuing a particular norm (e.g. sustainability in global trade), particularly when these are pursued in a unidirectional -Eurocentric- manner. To explore this further, we can ask ourselves the following questions, outlined in the chart:

Copyright: Partzsch, 2018 in Global Policy Volume 9 . Issue 4

Non-EU countries have criticized the EUDR as a unilateral measure and a form of protectionism against WTO rules. Although supporters stress the regulation’s essential environmental goals, international environmental law recognizes the principle of “Common but Differentiated Responsibilities.” This principle asserts that while all states bear responsibility for combating environmental degradation, they are not equally responsible, due to their different historical contributions to environmental issues.

Conclusions

The EUDR stands as the world’s most ambitious deforestation regulation. The EU has positioned itself as a leader in addressing global environmental challenges, setting up ambitious goals, but the path forward is not without controversy. Greater transparency and traceability in supply chains will certainly benefit all countries, but the methods for achieving this remain highly contested. 

The European Green Deal, embedded in the EU’s Climate Law, legally commits the EU to achieving climate neutrality by 2050. This bold target requires innovative and strategic ideas, but its success relies on international cooperation. Without collaboration with third-countries and a focus on climate justice in the discussions, EU’s goals may keep facing significant obstacles.

Open questions remain: Will Europe’s competitiveness be affected if deforestation shifts to regions with looser regulations? Is the current delay in implementing these policies necessary or a step backward? Are the Commission's recurrent postponements undermining the EU's credibility in the global stage? The answers to these questions will certainly shape the EU’s normative power in addressing global environmental challenges in the years to come.